THE IMPORTANCE OF
CUSTOMER EXPERIENCE
IN CONSUMER BANKING
By Imad Alabed, Senior Director, Pivotal CRM and Knova, Aptean
CASE STUDY
WHITEPAPER
Customer experience is becoming an increasingly important factor in the global retail banking market and
that’s where CRM tools hold many of the answers.
Customer experience is an increasingly important task for any business, especially in retail banking. The sector is still
working to repair its reputation in the wake of the financial crisis. New technology increases the avenues of engagement
and customers are becoming more connected, more demanding and less forgiving. With new players entering the
market, they are also faced with more choice. Banks need to place customer experience at the front and centre of their
operations to make sure their customers remain their customers, as well as to protect a reputation which can quickly
become fragile, especially when exposed to online communities. One of the best ways to do so is with the right Customer
Relationship Management (CRM) software designed for banks with tools that are flexible and adaptable to the ever
changing ecosystem. Of course, software alone is not enough and it is crucial to have a customer centric strategy that is
supported by the right CRM tool.
THE CUSTOMER IS
CHANGING
A NEW AGE OF RETAIL
BANKING
Today’s customer is more empowered and armed with much
A more demanding environment means the retail banking
more information before even the first contact; they are less
sector has to change. As PwC’s report (Retail Banking 2020
loyal as they search for the best deal and are likely to maintain
Evolution or Revolution?) acknowledges, retail banking will
a relationship with more than one financial institution, which
have to contend with a number of issues over the coming years
means customer experience becomes a key competitive
including the tightening grip of regulation, the rise of Fintech,
consideration. Retail banks, therefore, need to see the
low growth and costs which are difficult to contain. Customer
world from their customers’ point of view, understand what
confidence remains shaky and banks are still battling to win
competitors are doing and develop an effective customer
back their position of trust.
relationship strategy which maximises value for all sides.
Some of these issues will be challenges, others will offer
The importance of positive customer experience was revealed
opportunities. The rise of Fintech, for example, sees smaller,
in a recent report from Deloitte (Reshaping the retail banking
mobile financial institutions offering a faster and more
experience for the customer of tomorrow). 90% of customers
affordable service than traditional banks. At the same time, it
trust peer reference; they are seven times more likely to trust
provides opportunities for growth and new revenue streams.
a reference from a peer than an advertisement. If a customer
experiences poor customer service, he or she may never return
and will advise their friends to do the same.
It is less so a disruptive technology, rather a collaborative
opportunity to build value for a bank’s client base. Santander,
for example, partners with several Fintech firms including the
Customers are sceptical about financial services with only 44%
biometrics firm Socure, and investment firm SigFig. It holds
saying they trust financial services institutions, and when they
Fintech Venture days and has a $100million Fintech fund in the
complain they make a bigger impact; 44% said they use social
shape of Innoventures. Citi, meanwhile, partners with credit
media to make complaints. With social media use doubling
scoring firm Demyst Data and is developing its own digital
between 2006 and 2012, word of mouth advertising is stronger
payments infrastructure.
than ever before.
Retail banking may face challenges but the outlook is still
reasonably good. Analysts at Wise Guy Reports suggest the
global retail banking market will grow at CAGR 6.08% to 2020.
It will, however, change significantly, both in the way it uses
technology and in how it presents itself. When Metro Bank
became the first new UK highstreet bank in 2010, it presented
itself as a fresh face relying on transparency, friendliness,
accessibility and strong customer service. TSB did much the
same thing when it returned after the split with Lloyds; its
marketing focused on strong community values. The message is
very different and the focus clear – the customer comes first.
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All this contributes to added choice and opportunity for the
One thing to also note is the MiFID (Markets in Financial
customer. Even so, it still has some way to go. The Capgemini
Instruments Directive) II regulation that will be applied to all
World Retail Banking Report found that banks admitted they
European Members in January 2018. This new regulation aims
had not yet got a grip on the emerging Fintech revolution.
to improve the functioning of financial markets making them
Furthermore, while attempts to improve customer services were
more efficient, resilient and transparent. This new regulation will
bearing fruit, they had not yet had a major impact on revenues.
have a huge impact on CRM implementations in the financial
The report found that although the Global Customer Experience
Index improved by 2.9, it has failed to increase customer
behaviours that lead to improved profitability. Customers are
more likely to refer friends to their Fintech firm than to their
bank.
services industry as it will require tools that are able to handle
risk assessments, data analyses, segmentations, recordings of
conversations with customers… in other words, this is where a
CRM solution will be crucial and mandatory.
THE ROLE OF TECHNOLOGY
IN CUSTOMER EXPERIENCE
Poland’s example illustrates the ways in which technology can
be used to drive better customer experience. This begins with
defining what good customer experience looks like. Banks will
have a traditional view of customer experience: good rates,
easy access to staff, support and their accounts. However,
in an evolving marketplace, the customer is becoming more
segmented and complicated. Retail banks need to get to
know their customers and understand what they are looking
for – in other words, they have to see life from the customers’
perspective.
REGIONAL VARIATIONS
Plus, it is not enough to only provide good rates and good
service. A customer experience focus should strive to delight
customers with every interaction. The Ernst & Young’s Global
The experience of retail banking also varies considerably from
Consumer Banking Survey highlights a number of strategies
region to region. More developed Western European and North
which can improve customer retention.
American institutions are already coping with regulations and
are putting technology to good use. In Eastern Europe the
picture is more mixed. In Russia the banking sector was severely
affected by the financial turmoil of 2014 including the rapid
devaluation of the Ruble. Funding has been hard to come
by and assessments by ratings agencies have been negative
sparking a decline in revenues. Banks downsized their branches,
restricted their lending and moved customers to remote
servicing.
Blueshore Financial, a full-service financial institution offering
a wide range of banking, borrowing, wealth management,
insurance and business solutions, uses Apteans’ Pivotal CRM
solution and is a great example of how important customer
experience can be. Before implementing their CRM solution, the
company’s main challenge was to compete with other financial
institutions that were globalizing, reducing costs and therefore
providing their services at a cheaper price. Chris Catliff, CEO and
President of BlueShore Financial, said that in order to compete
Banks in Poland, on the other hand, have been very effective
on price, they had to provide better service. They needed a way
in managing their customer experience. They have focused on
of managing their expectations and providing service that was
segmenting their customer bases using customer management
notably better than their competition. “And our CRM strategy
software. They have made highly effective use of digital
was the answer. It was a simple solution to a very complex
technologies including mobile banking, digitally driven
problem. We have grown between 20 and 25 percent each
simplification and more effective on-boarding.
quarter— on an annualized basis—since we implemented
Pivotal CRM,” says Chris.
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GIVING CUSTOMERS WHAT
THEY HAVE ELSEWHERE
(ALREADY)
Banks, suggested the Global Consumer Banking Survey, should
It is crucial to come up with a strategy that will allow banks to
reach customers based on their habits and preferences. The
survey helps banks by breaking customers down into different
segments in the following way:
•
have significant levels of income. They use the most services
make banking simpler. People are bombarded with information
but are the most likely to defect because they see banks as
in all areas of their life. What they want is something which is
simply another service provider.
concise, transparent and clear. Banks should be open about the
fees they charge, rates, services and communications.
•
repeat business to those institutions which help them
their banks. They are digitally-minded and want to be able to
achieve their financial goals.
communicate through a choice of channels – social media, web,
their channel of choice. If you can’t fulfil that expectation, there
•
a bank, particularly when it comes to customer support. The
users of technology and are very receptive to new entrants.
•
Balancers: They use remote channels but value a longterm relationship with a trusted bank. They place a
survey found that banks can grow their business if they offer
strong emphasis on transparency over fees and problem
more financial advice. More than 70% of respondents said they
resolution.
would increase the amount of business they do with their bank
if advisory services improved. A bank can improve this service by
New World Adopters: Young, highly educated with
moderate incomes, but high levels of savings. They are big
will be someone who can.
They also want a more interactive two-way relationship with
Elites: They are older, highly educated with high household
incomes. They are likely to act as advocates and to offer
Customers also want a choice of ways to communicate with
email, text and in-person. Customers expect to be replied to on
Upwardly mobiles: They are young, highly educated and
•
Safety Seekers: The largest group – they are less educated
making use of a combination of internal and external resources.
and have limited cash. They enjoy using a local branch for
They can make use of a network of financial advisors and
their services and value banks which can keep personal
experts – using technology to connect them more easily with
information safe.
customers. They can use big data to increase their knowledge
of customers and their behaviour; they can provide personal
•
Traditionalists: As the name suggests, they have a very
traditional approach to banking. They have the lowest
finance tools to help people invest and spend more wisely.
remote channel usage and are heavy users of ATMs. They
Finally, banks can be proactive in addressing issues and resolving
have few products but are willing to increase engagement
problems. Although there will inevitably be problems from time
when offered new products.
to time, customers showed a surprising willingness to reward
behaviour from banks which they viewed as positive. Of those
•
to spend and rarely open or close accounts.
customers who were very satisfied with the way in which a
problem was resolved, more than half (58%) gave most, or all,
of their business to that institution. By making it easy to raise
queries, get support and see how a problem is resolved, banks
can win back customer trust and make great strides towards
retaining their business.
Self-Sufficients: They have low levels of trust, little money
•
Unhappy and unmoving: The most difficult group to reach;
they are unhappy with their service provider yet unwilling
to move because they believe all financial institutions are
as bad as each other. This segment is the oldest, and least
educated.
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THE FUTURE OF METRICS
Banks should work out a way to bring all this information into
As we move into the future, the advent of big data is changing
number of people who recommend their service, with those
the way banks measure aspects of their customer engagement.
who buy more services, to come up with a single customer
Why simply ask them about their intentions when there’s so
experience rating.
much information about what they actually do? Actions speak
louder than words and customers’ actions often differ to what
they say.
a more coherent view. For example, they could multiply the
CRM tools can also play an important role in collecting and
segmenting all the information around customer needs and
expectations. They amalgamate all the disparate information
The majority of financial institutions use multiple measures
coming into a business from multiple sources, such as customer
to assess their customer performance such as retention rates,
surveys, sales figures, social media, the web and much more
customer satisfaction scores and the number of products per
and can present this in clear, accessible and easy to understand
customer. Others use their net promoter score. Surveys are
charts.
popular; banks will often ask their customers how likely they
are to recommend the service to a friend, but this has one clear
weakness in that it measures intention rather than action – and
so can be misleading.
It can give banks a truly 360-degree customer view. Because
of the complexity of the bank/customer relationship this can
be extremely difficult using conventional tools. CRMs, though,
give banks all the information they need to be transparent and
Responding to a survey requires relatively little thought. What a
customer-focused. It operates as a single central hub creating
customer actually does, though, reveals their intentions. Banks
a single source of truth and a repository for all customer
need to look at the issue from the customers’ perspective and
interactions.
ask how they show their loyalty. Two of the key indicators are
that they buy more products and refer the service to a friend.
Looking at which customers have actually made referrals, rather
than intend to, gives a much clearer answer.
Banks can gather information from the first time they interact
with a customer during the on-boarding process about their
financial goals and requirements. This enables the bank to sell
products and sell messages based around the tailored profile of
With so much data around there is always a risk of data
each customer. It helps them provide information and services
overload. When using multiple factors to measure customer
which enhance the customer experience. CRM is not only about
satisfaction, you will get multiple answers, not all of which will
capturing interactions but using this information to go above
correlate.
and beyond customer expectation.
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MOBILITY, E-BANKING AND
CROSS-SELLING
The rise of e-banking is having a profound impact on the
relationship of the customer and the bank. A new interaction
process has risen and the point of contact has changed. No
longer is the banker to be found behind the counter: they will
be in your phone, computer or tablet. CorpBanca, a leading
banking group in Latin America, uses Aptean Pivotal CRM to
cover all the processes the bank needs. The implementation of
CONCLUSIONS
To maximise customer ROI, banks need to think of a new way
to cross-sell. CRM tools enable banks to gather huge amounts
of information about the customer and deliver a service
tailored to their needs. The balance has changed. Traditional
banking models were based around a suite of services which
suit the bank. The future of retail banking will be one in which
consumers receive a bespoke relationship with their bank with
services and information tailored to their profile.
the CRM solution has resulted in the company being above the
Entrenchment is the biggest problem. Banks have been used
average customer satisfaction rate for banks in Chile. CorpBanca
to working in their own way and have had the market very
is now looking into migrating to a new version of Pivotal CRM,
much to themselves. This is, in part, why they face a crisis of
designed specifically for mobile applications. With a new
confidence among their consumers. Traditional retail banking
customer UX and many features such as support for tablets
is seen as a model which does not put the customers first.
and mobile phones, Pivotal will continue to provide even more
The future will see consumers receiving the range of flexibility
reactivity for Corpbanca.
and personalisation they expect in other areas of retail. In this
challenging and uncertain future it will be those institutions
which adapt most successfully that will have an edge.
Aptean is a leading global provider of mission critical enterprise software solutions. We build and acquire
industry-focused solutions to support the evolving operational needs of our customers. Our solutions help nearly 6,500
organizations stay at the forefront of their industries by enabling them to operate more efficiently, thereby ensuring
higher customer satisfaction. For more information, visit www.aptean.com.
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